At the end of September, the Clinton
Administration finally addressed "the vision thing" in the domain of
foreign policy, with major addresses by the President and Secretary of
State, and of particular significance, by National Security Adviser
Anthony Lake, who laid forth the intellectual foundations of the new
Clinton doctrine at the Johns Hopkins School of Advanced International
Studies. A new National Export Strategy was announced that set
guidelines for international economic policy, and a White House panel
on intervention applied the doctrine in this particular sphere, all
within a few days. The seriousness of the enterprise was duly recorded
with such headlines as "U.S. Vision of Foreign Policy Reversed"
(Thomas Friedman, New York Times), implying a dramatic
policy change.1

The new vision is based on a picture of the contemporary world that
has risen well beyond opinion, to the heights of truism. The picture
is sketched eloquently by the Times chief diplomatic
correspondent, Thomas Friedman: "America's victory in the cold war,"
Friedman wrote a year ago, was "a victory for a set of political and
economic principles: democracy and the free market." At last, the
world is coming to understand that "the free market is the wave of the
future -- a future for which America is both the gatekeeper and the
model."2

The term "gatekeeper" has an ominous ring. The whole affair merits
some thoughts about how we keep the gates, who we let in, and what
kind of model we are to offer to the world. We begin with Anthony
Lake's address, recognized to be the centerpiece of the new vision.

1. "From Containment to Enlargement"

A long-time liberal dove, Lake explained that "Throughout the cold
war, we contained a global threat to market democracies: now we should
seek to enlarge their reach." Containment having succeeded, we can now
go on to "enlargement -- enlargement of the world's free community of
market democracies." The title of his address is: "From Containment to
Enlargement." That is the new vision that replaces the defensive
stance of the past half century. People everywhere can only hail this
new departure, realizing that "of course" the US is unlike any other
nation past or present, Lake observes, in that "we do not seek to
expand the reach of our institutions by force, subversion or
repression." Commentators were duly impressed by this enlightened
stance.

A rational person who wanted to know what Russia (pre-Gorbachev)
was trying to do in world affairs would, naturally, look at
what Russia did do where its influence reached, specifically,
in the East European satellites. Undertaking that exercise, sane
people -- assuming that they did not simply collapse in ridicule --
would have known how to evaluate an announcement by Leonid Brezhnev
that the USSR would no longer be content with containing the Evil
Empire, but would now move on to "enlargement" of the community of
free and democratic societies. Similarly, sane people who wanted to
know what the US is trying to do in world affairs would look at what
it has done where its influence reached, and would evaluate the
announcement of the new vision in these terms -- again, assuming that
they did not simply collapse in ridicule. It is interesting that the
questions that would occur to a moderately intelligent 10 year old do
not seem to have been raised.

This stance might be justified by the argument often voiced in
sophisticated circles that in the special case of the United States,
facts are irrelevant. Thus in the prestigious journal
International Security, the Eaton Professor of the Science of
Government at Harvard instructs us that the United States must
maintain its "international primacy" for the benefit of the world,
because its "national identity is defined by a set of universal
political and economic values," namely "liberty, democracy, equality,
private property, and markets" (Samuel Huntington). Since this is a
matter of definition, so the Science of Government teaches, it
would be an error of logic to bring up the factual record, and we
would simply be illustrating our silliness by doing so, as if Orwell's
Winston Smith had experimented with objects scattered on a table top
to test Big Brother's denial that 2+2 = 4.3

Lacking sophistication, let us proceed nonetheless.

We might also tarry briefly on Orwell's core concerns, not given
quite the prominence of his critique of the official enemy. In an
unpublished introduction to Animal Farm, Orwell wrote
that "The sinister fact about literary censorship in England is that
it is largely voluntary. Unpopular ideas can be silenced, and
inconvenient facts kept dark, without any need for any official ban."
The desired outcome is attained in part by the "general tacit
agreement that `it wouldn't do' to mention that particular fact," in
part as a consequence of media concentration in the hands of "wealthy
men who have every motive to be dishonest on certain important
topics." As a result, "Anyone who challenges the prevailing orthodoxy
finds himself silenced with surprising effectiveness."

Orwell believed that the United States was different, more free and
open. That error was not made by John Dewey, more familiar with US
intellectual culture. Speaking of "our un-free press," he observed
that critique of "specific abuses" is of limited value: "The only
really fundamental approach to the problem is to inquire concerning
the necessary effect of the present economic system upon the whole
system of publicity; upon the judgment of what news is, upon the
selection and elimination of matter that is published, upon the
treatment of news in both editorial and news columns." We should ask
"how far genuine intellectual freedom and social responsibility are
possible on any large scale under the existing economic regime." Not
very far, he judged.4

The reaction to Clinton's new vision falls well within these
strictures, though to document the (virtually exceptionless) pattern
of which this is a typical instance is something of a waste of time,
as Orwell and Dewey recognized. The more firmly conclusions are
established that challenge system-supportive doctrine, the more they
must be suppressed; if the conclusions were established by the
standards of physics, they would have to be buried so deep in the
memory hole as to be completely beyond recovery. Those who fail to
grasp these simple requirements would be well advised to seek a trade
outside of the respectable intellectual culture, where the gatekeepers
understand what "it wouldn't do" to say or think.

Returning to the questions that would at once occur to a naive ten
year old, to evaluate the announcement of the new vision, we turn to
US behavior in regions where its influence reached. There are many
choices, the US being a global power. But the most illuminating will
surely be the Western Hemisphere, where the US has long run the show
virtually without interference, so its deepest values and convictions
are revealed with great clarity.

According to the doctrine that we are to accept as unquestioned
truth, "throughout the Cold War we contained a global threat to market
democracies" in the Western hemisphere, never having sought to expand
our power "by force, subversion, or repression," from the days when we
were "exterminating...that hapless race of native Americans...with
such merciless and perfidious cruelty" (John Quincy Adams), until the
present. To put the best possible face on the higher truths that it is
unthinkable to question, let us select the peak moments of American
liberalism, the days of JFK and LBJ (who far surpassed his predecessor
in his commitment to liberal ideals). Taking just the most important
case of the many that come to mind, the higher truth entails, then,
that at the peak of modern liberalism, JFK and LBJ dedicated
themselves to the violent overthrow of the parliamentary government in
Brazil in favor of a National Security State in order to contain a
global threat to market democracy.

So, indeed, the matter was perceived. Kennedy's Ambassador Lincoln
Gordon, who moved on to Washington after helping lay the groundwork
for the coup, lauded the "democratic rebellion" of the neo-Nazi
Generals as "a great victory for the free world," "one of the major
turning points in world history." "The principal purpose for the
Brazilian revolution was to preserve and not destroy Brazil's
democracy," the respected liberal democratic statesman informed
Congress two years later, while the torturers and murderers were --
very visibly -- at work. It was "the single most decisive victory of
freedom in the mid-twentieth century," he testified, and should
"create a greatly improved climate for private investments" -- a
comment we may file away for later reference. After leaving the State
Department, Gordon went on to become the President of Johns Hopkins
University, where Lake announced the new revolution in foreign policy.

As the Generals instituted a regime of fascist terror, Brazil
became "the Latin American darling of the international business
community," the business press reported. It was also hailed by the
leading academic apostles of the free market, much impressed by the
purity of doctrine of the technocrats and the "miracle" they had
wrought -- though in fairness, it should be added that there were
occasional reservations about the sadistic violence by which the
miracle was instituted. The euphoria persisted through the 1980s,
until the fortunes of the rich began to be affected by the economic
disaster, at which point the methods that had been hailed as a "real
American success story," yielding "impressive economic growth based
solidly on capitalism," were suddenly transmuted to a proof of the
failure of statist interference with our market ideals; the
self-adulation, not untypical, is quoted from a highly regarded 1989
scholarly monograph by Gerald Haines, senior historian of the CIA.5

Brazil is a highly illuminating case, perhaps the reason why "it
wouldn't do" to reflect on the obvious lessons. Brazil is far and away
the most important country in Latin America, firmly under US control
since 1945, when it became a "testing area for modern scientific
methods of industrial development" applied by US experts, Haines
observes with pride. It is a country with enormous resources that
should be the "Colossus of the South," ranking alongside the "Colossus
of the North," as predicted early in the century. It has had no
foreign enemies, and benefited not only from careful US tutelage but
also from substantial investment. It therefore shows with great
clarity just what the US can achieve in "enlarging the free community
of market democracies" under conditions that are near ideal.

The successes are real enough. Brazil has enjoyed a very high
growth rate, which conferred enormous wealth on everyone except its
population -- apart from the top few percent, who live at the
standards of the wealthiest Westerners. It is a sharply two-tiered
society. Much of the population live at a level reminiscent of Central
Africa. As Haines was hailing the success story of American style
capitalism, the UN Report on Human Development ranked
this rich and privileged country in 80th place, alongside of Albania
and Paraguay. In the northeast, Brazilian medical researchers describe
a new subspecies: "pygmies," with 40% the brain capacity of humans,
thanks to severe malnutrition in a region with fertile lands, owned by
large plantations that produce export crops in accord with the
doctrines preached by their expert advisers. Hundreds of thousands of
children die of starvation every year in this success story, which
also wins world prizes for child slavery and murder of street children
-- in some cases for export of organs for transplant, according to
respected Brazilian sources.

Perhaps Brazil was unusual. We might therefore look elsewhere,
perhaps Guatemala, turned into a "showcase for capitalism" in 1954
when Washington overthrew the democratic capitalist government and
soon to celebrate the fortieth year of our achievements in
exterminating another "hapless race of native Americans with such
merciless and perfidious cruelty," along with others who were in the
way. Or El Salvador, the recipient of some $6 billion in "aid" from
the US in the 1980s. The results, always well known outside of
Orwell's "prevailing orthodoxy," were recently reviewed by the UN
Truth Commission, which attributed 85% of the horrendous record of
atrocities to the security forces trained, armed, and advised by the
US, and another 10% to the death squads linked to them and to the
wealthy business sector that the US expects to keep firmly in power.
The media meanwhile professed shock at the revelation of what they had
chosen to suppress when it mattered. The Clinton Administration
responded by establishing a Commission to inquire into this grim
history; its mandate was to improve procedures, nothing more, because
"We don't want to refight the battles of the 80's. We're not a
house-cleaning Adminstration." The Salvadoran government agreed,
issuing an amnesty for the killers and torturers in gross violation of
the peace accords that established the Truth Commission, which stated
that the guilty must be punished, and rejecting the Truth Commission
demand that the Supreme Court be dismantled in view of its record of
complicity in atrocities.

Immediately after the Truth Commission report appeared, the
political party of the killers (Arena), which the US continues to
support, held its convention to nominate its candidate for the coming
election, Armando Calderon Sol. The party dedicated itself anew to
defending the memory of the founder, Roberto d'Aubuisson, one of
Central America's great murderers, trained at the School of the
Americas, now at Ft. Benning, Georgia. Calderon Sol declared that the
party is united "more than ever to defend [d'Aubuisson's] memory,"
while the convention hall echoed with the Arena theme song, which
pledges to make "El Salvador the tomb where the Reds will end up" --
the term "Reds" being understood quite broadly, as events have shown.6

In El Salvador too our defense of market democracy has spared its
beneficiaries no horror. The Salvadoran government procurator for the
defense of children, Victoria de Aviles, recently acknowledged that
the "big trade in children in El Salvador" involves not only
kidnapping and a gratifying improvement in exports, but also their use
"for pornographic videos, for organ transplants, for adoption and for
prostitution." Hardly a secret, veteran British Latin America
correspondent Hugh O'Shaughnessy observes, recalling his direct
observation of an operation of the Salvadoran army in June 1982 near
the River Lempa, where the US-trained troops "had a very successful
day's baby-hunting," loading their helicopters with 50 babies whose
"parents have never seen them since." O'Shaughnessy's report on
"Takeaway babies farmed to order" appeared in the London
Observer the same day that the Times featured
Anthony Lake's uplifting and admired remarks on "enlargement" of our
traditional mission of mercy and benevolence.7

There is no need to review further how we have "contained a global
threat to market democracy" in "our little region over here," as FDR's
Secretary of War, Henry Stimson, described the Western hemisphere. It
is enough to recall a warning issued by Simon Bolivar in 1822, as he
sought to liberate Latin America from Spanish rule: "There is at the
head of this great continent a very powerful country, very rich, very
warlike, and capable of anything" -- including the evasion of
"inconvenient fact."

US power has of course reached far beyond the Western hemisphere.
The obvious example that our hypothetical ten year old would look at
to evaluate the presupposed higher truth is the Philippines, which has
benefited from almost a century of US rule, tutelage, and assistance
since its liberation-through-slaughter. The country is situated in the
world's leading growth area, in which it remains the sole basket case,
very much on the Latin American model. Could that tell us something
about our role in advancing market democracy? One could write a
revealing article reviewing how the question has been addressed in the
respectable literature; a very brief article.

We learn more about our role as "gatekeeper and model" from a World
Bank study reported in the London Financial Times just as
the new vision of foreign policy was released here.8
The World Bank found that Latin America has "the most unequal income
distribution in the world," and predicted "chaos" unless governments
"act aggressively against poverty," which is truly appalling in its
depth and scale. Why should Latin America win this glorious record
too? Another obvious question, lying well beyond the horizons of
respectability.

Those interested in an answer might look back to 1945, when the US
was setting out on its crusade to "contain the global threat to market
democracies" -- or as the senior historian of the CIA puts it, when
"the United States assumed, out of self-interest, responsibility for
the welfare of the world capitalist system." In "our little region
over here," our foreign enemies -- France and Britain -- were to be
displaced, so we would have a free hand. That was simple enough, but
another problem arose: Latin Americans had not taken the right
graduate courses and didn't understand the fundamental principles of
economic rationality, which required that their development be
"complementary" to the US economy, in accord with the sacred principle
of comparative advantage. The Latin American countries advocated what
a State Department officer described as "The philosophy of the New
Nationalism," which "embraces policies designed to bring about a
broader distribution of wealth and to raise the standard of living of
the masses." Another State Department expert reported that "Economic
nationalism is the common denominator of the new aspirations for
industrialization. Latin Americans are convinced that the first
beneficiaries of the development of a country's resources should be
the people of that country." These mistaken priorities ran directly
counter to Washington's plans. The issue came to a head in a February
1945 hemispheric conference, where the US put forth its "Economic
Charter of the Americas," which called for an end to economic
nationalism "in all its forms." The first beneficiaries of a country's
resources must be US investors and their local associates, not "the
people of that country." There can be no "broader distribution of
wealth" or improvement in "the standard of living of the masses,"
unless, by unlikely accident, that happens to result from policies
designed to serve the interests of those with first priority.

Given US power, economic rationality prevailed, with the
consequences that the World Bank now fears. All happily invisible to
the triumphalists.

Perhaps something changed in more recent years, say the 1980s, when
the yearning for democracy became a leading principle of our foreign
policy, right-thinking people know. Instead of rendering my judgment,
let me cite that of Reagan insider Thomas Carothers, a State
Department official in the Latin American Bureau who "worked on a
variety of assistance projects designed to promote democracy in Latin
America and the Caribbean," he reports, and has written extensively on
the consequences; he has no doubts about the "sincerity" of the
efforts, though even his own account suffices to show that they were
utterly cynical in conception.

Carothers finds a correlation between US influence and the rise of
democracy in the hemisphere: a negative correlation. Where US
influence was least, in the southern cone, steps towards democracy
took place, opposed by the Reagan Administration, which later hastened
to take credit for them. Where US influence was greatest, the effects
were worst, in fact far worse than Carothers recognizes given his
crabbed conventional conception of "democracy," though he clearly
articulates the main point. Washington adopted "prodemocracy policies
as a means of relieving pressure for more radical change," he writes,
"but inevitably sought only limited, top-down forms of democratic
change that did not risk upsetting the traditional structures of power
with which the United States has long been allied." Its "impulse is to
promote democratic change, but the underlying objective is to maintain
the basic order of what, historically at least, are quite undemocratic
societies." The US keeps to "very limited, controlled forms of
democratic change" because of its "deep fear...of populist-based
change in Latin America -- with all its implications for upsetting
established economic and political orders and heading off in a leftist
direction."9

Washington's allies, therefore, are "the existing power
structures," not those who work "from the bottom up to spread the
ideas and principles of a democratic society among the citizenries."
These miscreants, in fact, are the ones left in ditches, tortured and
mutilated, dismissed to their proper place by the security forces we
train, arm, and advise -- though awareness of that decisive truth is
too much to expect.

What of the "global threat" to the "market democracies" we were
defending in Latin America? Take Brazil, where US intelligence could
find no hint of Soviet intrusion, even if that were imaginable. In
fact, in "our little region" there have been no Russians in sight,
unless we virtually invited them in. It is perfectly true that targets
of US attack sought help from somewhere, and since they were not going
to get it from the subordinates of the Enforcer, they ultimately
turned to the Russians, who were sometimes willing to help, for their
own cynical reasons, in which case the US victims became tentacles of
the Evil Empire, whom we must destroy in self-defense.

By similar logic, a Soviet Anthony Lake could have argued that the
USSR was defending freedom and democracy in Afghanistan from the
"global threat" of American imperialism and its terrorist forces --
who, since liberation from Soviet rule, have been destroying and
massacring with great zeal and success, another "inconvenient fact"
that merits little notice. There would, for example, be little utility
in focusing on the exploits of the CIA favorite Gulbuddin Hekmatyar,
one of the world's most extreme Islamic fundamentalist fanatics, who
bears primary responsibility for 30,000 deaths in the capital city of
Kabul alone according to the London Economist, surpassing
Pol Pot in Phnom Penh, it appears.

Perhaps the "global threat" refers to indigenous Communists. Here
there is much to say, including some reflections on the familiar
doctrine that democracy requires exclusion of "Communists" from the
political system, by violence if necessary. Thus when the US-backed
terror regime was doing its work in Iran after the 1953 CIA-MI6 coup
that overthrew the conservative parliamentary government, the
New York Times praised the US clients for their "long record of
success in defeating subversion without suppressing democracy," noting
with pleasure the suppression of the "pro-Soviet Tudeh party,"
formerly "a real menace" but "considered now to have been completely
liquidated," and the "extreme nationalists" who had been almost as
subversive as the Communists -- all liquidated without suppressing
"democracy." The practice is, again, standard, and passes with little
comment, given the prevailing concept of "democracy."

Still more interesting, perhaps, is the way the concept "Communist"
is understood. Here the record is voluminous and consistent: to gain
the title "Communist," it is enough to work "from the bottom up,"
appealing to the "poor people" who "have always wanted to plunder the
rich," as John Foster Dulles described the plague. That is precisely
why the US terror war in Central America, motivated by the "sincere
impulse" to bring democracy, was in large measure a war against the
Church -- "Communists," in the technical sense, once the Bishops had
adopted "the preferential option for the poor." Nothing changes in
this regard as new visions replace the old.

The Bush-Clinton approach to Haiti reveals the pattern of
continuity with only tactical modifications. The matter requires much
more careful treatment, but a close look will show that since the
military coup that overthrew President Aristide, the basic goal has
been to impose a settlement that will deny more than a figurehead role
to the elected President, much disliked in Washington and New York
because of his remarkable base of support in popular organizations
that threaten to bring about functioning democracy. If Aristide can be
returned alive, fine; it will offer opportunities for pieties about
our dedication to democracy. But the bottom line is that effective
power must remain with the "moderate" and "progressive" sectors of the
business classes -- meaning those who do not see massacre and torture
as the optimal means to dominate and marginalize the poor majority. In
the interests of "democracy," the ruling sectors will have to be
"broadened" to include the torturers and murderers as well --
"conservative critics close to the military," as the New York
Times prefers to call them.10
No problem, because the military will be professionalized by US
trainers, that is, by the same people who have already civilized the
top command in Ft. Benning, including those now orchestrating the
bloodbath -- facts quietly omitted from the standard resumes.

But the government will not be "broadened" to include the
overwhelming majority of the population, who are to be reduced to
traditional passivity by the effective use of terror, their
organizations decimated and their leaders either killed or placed in
remote cubicles. We will then be told that this is the best form of
"democracy" for backward peoples lacking our sophistication,
democratic culture, civility and respect for others, and our
traditions of freedom and justice.

An important fact about our intellectual culture is that people can
read and write about our long-term policies of defending market
democracy from the Communist threat without laughing. That takes no
little talent. It is real tribute to the educational institutions and
the information system.

2. Defending Market Economies

Let us drop the drivel about our love of democracy and look at the
market, thus at least approaching the real world. Recall the one
quoted statement of Lincoln Gordon's that does not simply send shivers
up the spine: the neo-Nazi triumph should "create a greatly improved
climate for private investments," as indeed it did. It is quite true
that we seek to impose market discipline on the Third World, now
including the large regions of Eastern Europe that are to return to
their Third World origins. But the odes to the market are carefully
crafted to conceal two important facts. First, market discipline in
the Third World is attractive because it will leave the societies open
to Western plunder. Second, the wonders of the market are for them,
not us, and have always been: every successful developed society, from
Britain to the East Asian Tigers and dramatically including the US,
gained this status by radical violation of the doctrines we impose on
the poor and keeps that status in the same way.

The second prong of the new vision, Clinton's new international
economic program, reflects the understanding of these truisms. While
Administration rhetoric on the marvels of free trade boomed on the
front pages as part of the PR campaign to ram through an unpopular
(and in fact, highly protectionist) version of a North American "free
trade" agreement (NAFTA), the business sections reported the new
National Export Strategy that is to go far beyond the "less
coordinated efforts" of Reagan and Bush, with a planned expansion of
Export-Import Bank lending, which as the Reaganites had conceded in
their day, already violated GATT rules. The Clinton Administration
opposes the measures it is implementing, the press reported, because
"they amount to government subsidies that distort international
markets." But there is no contradiction. As explained by Ex-Im Bank
President Kenneth Brody, "by creating such a program in the United
States, the Clinton Administration would have more influence in
seeking international limits on such lending." The President also
approved an independent program that would release $3 billion in loan
guarantees to domestic and foreign buyers of US-built ships -- again,
for the purpose of inducing others to end such gross interferences in
the market, the Wall Street Journal explained.

The logic will be recognized instantly: war brings peace, crime
brings law, arms production and sales bring arms reduction and
nonproliferation, overthrowing democratic governments brings
"showcases for democracy," etc. In simple words, anything goes, as
long as there is a good answer to the question: "What is in it for
us?"

The simple truths were underscored by Clinton's Treasury Secretary
Lloyd Bentsen: "I'm tired of a level playing field," he said: "We
should tilt the playing field for U.S. businesses. We should have done
it 20 years ago." In fact, "we" (meaning state-corporate power) have
been doing it for two centuries, dramatically so in the past 50 years,
even more under the Reaganites. But that is the wrong image to convey.
It is preferable to speak warmly of Carter-Reagan achievements in
moving "toward a defense buildup and less government intervention in
the economy" -- Harvard economist and Wall Street Journal
contributing editor Robert Barro, pretending (it has to be a pretense)
that he does not know that the Pentagon is, and has been explicitly
designed to be, a massive form of government interference in the
economy to ensure that high-tech industry feeds at the public trough.11

As I discussed here in February, the Reaganites had forged new
paths in violating market orthodoxy for the benefit of US-based
corporations, but they did not go far enough to satisfy the business
community, one reason for the substantial corporate-financial support
for Clinton's program as a New Democrat. And the new programs, like
the old, are described in the business press, renowned for its
devotion to the needs of working people, as aimed at increasing
"jobs," a term that has taken on the meaning of the unpronounceable
word "profits" in conventional Newspeak.

The phrase "What is in it for us?" is not mine. I stole it from the
third component of the new Clinton vision, the decisions of the White
House panel on intervention. The Clinton panel determined to put an
end to the era of altruism. No more "nice guy," as in the days when we
turned much of the world into graveyards and deserts. Henceforth the
guiding consideration will be "What is in it for us?," the words that
the New York Times highlighted in its report.

Thomas Friedman's full report on the new "enlargement" doctrine
fills in the picture. The National Security Adviser, he observed, had
focused on the fact "that in a world in which the United States no
longer has to worry daily about a Soviet nuclear threat, where and how
it intervenes abroad is increasingly a matter of choice." That is the
"essence" of the new doctrine, Friedman emphasized, a doctrine that
clearly and explicitly reflects the understanding that the "nuclear
threat" was the Soviet deterrent to US intervention. Now that the
deterrent is gone, intervention can be freely undertaken, as had been
observed years earlier by others, with the Cold War winding down.

Summarizing, the new vision is that in the international economy,
we will no longer be satisfied by a "level playing field" for US
corporations, but will construct a proper tilt by violating free trade
rules even more thoroughly than before. And with the deterrent gone,
we will intervene where and how we choose, though only when there is
something in it for us. The technical term for this stance is "the
Politics of Meaning," to which the Clintons are said to be sincerely
devoted.

Actually, there is nothing new in the new vision, apart from
tactical adjustments reflecting new realities of global power. The
mood of despair in the Third World is easy to understand, quite apart
from the catastrophe of global capitalism that has ravaged the
traditional colonies. It is captured by a leading Brazilian
theologian, Cardinal Paulo Evaristo Arns of Sao Paulo, Brazil, who
observes that throughout the Third World "there is hatred and fear:
When will they decide to invade us," and on what pretext? And by
Egypt's leading newspaper, the quasi-governmental Al-Ahram,
which describes the new world order as "codified international
piracy."

Another component of the new vision was leaked to the press as its
basic features were being presented in public: a draft report on
government secrecy sent to the National Security Council by Clinton's
Information Security Oversight Office. The report recommends that
classified documents be held for longer than was the practice during
the Cold War, apart from the rule of the Reaganite reactionaries,
whose commitment to state power and secrecy went far beyond the norm.
Their 1982 decision to keep "virtually all [secret government]
documents classifed indefinitely" is to be relaxed, AP reported, with
restrictions of only up to 40 years, as compared to Nixon's "hold
period" of 30 years and Carter's of 20 years. The Clinton task force
also recommended slow and extremely costly document-by-document review
instead of declassification en masse, and called for "balancing public
interest and national security concerns," as determined by "agency
officials." The procedure for automatic declassification of certain
top secret documents, set at 10 years by Nixon and 6 by Carter, is
should be extended to 15 years, the task force proposed.12

Returning to our attitude towards markets, the doctrinal system has
faced unexpected problems among the population, who were expected to
sit by in silence and ignorance while the state executives rammed
through their secret version of NAFTA, grossly misdescribed as a "free
trade agreement." In the light of unanticipated popular opposition, it
has been necessary to revive traditional modes of population control.

In earlier years, huge propaganda campaigns had been undertaken to
overcome deviant ideas among the general public, notably after World
War II, when the world was swept by a current of social reform,
bitterly fought by the US government at home and abroad. Success in
reversing these trends was great in most of the world, including the
United States itself, though in Europe and Japan the attack on labor
and democracy did not achieve all of its goals and countries adopted a
kind of "social contract" that included such depraved ideas as health
care, workers' rights, and other departures from the principles for
which we serve as a gatekeeper and a model.

In the US, the wave was beaten back in part through massive
propaganda efforts orchestrated by the Chamber of Commerce and the
Advertising Council, which conducted a $100 million campaign to use
all media to "sell" the American economic system -- as they conceived
it -- to the American people. The program was officially described as
a "major project of educating the American people about the economic
facts of life." Corporations "started extensive programs to
indoctrinate employees," the leading business journal Fortune
reported, subjecting their captive audiences to "Courses in Economic
Education" and testing them for commitment to the "free enterprise"
system -- that is, "Americanism." The scale was "staggering,"
sociologist Daniel Bell (then a Fortune editor) observed,
as the business world sought to reverse the democratizing thrust of
the Depression years and re-establish the ideological hegemony of the
"free enterprise system." A survey conducted by the American
Management Association (AMA) found that many corporate leaders
regarded "propaganda" and "economic education" as synonymous, holding
that "We want our people to think right." The AMA reported that
Communism, socialism, and particular political parties and unions "are
often common targets of such campaigns," which "some employers
view...as a sort of `battle of loyalties' with the unions" -- a rather
unequal battle, given the resources available, including the corporate
media, which offered the services free of charge, then as now.

The results were remarkable, leaving the US off the spectrum of
industrial societies on social issues and basic human rights. Health
care is one case that finally gained attention, as the highly
bureaucratized and inefficient private system began to become too much
of a burden to corporations, though the US will remain alone, it
seems, in ramming through -- again, over popular opposition -- a
system that is highly regressive (not tax-based) and that attends
carefully to the needs of the few huge insurance companies that are to
take the central management role, at substantial public cost.

We might note that this is characteristic of the "welfare state." A
minimally realistic picture of the phenomenon will take into
account the fiscal measures designed to benefit the rich, which amount
to hefty government welfare payments. Reviewing the scale of these
devices, political scientist Christopher Howard points out that "one
crucial fact remains: the middle- and upper-income classes are the
main beneficiaries of the hidden welfare state." Thus "over 80% of the
tax benefits for home mortgage interest, charitable contributions, and
real estate taxes go to those earning more than $50,000," not to speak
of "the large fraction of tax expenditures that subsidize corporate
fringe benefits."13
Moving on to a fully realistic conception of the "welfare
state," we will also take account of the Pentagon system, export
promotion devices, and other measures designed to provide taxpayer
subsidies to the wealthy -- to protect "jobs," in standard parlance.
The new health reform program is well-crafted to satisfy the
conditions of one-sided class warfare that guide policy generally.

On health reform, it has so far been possible to keep the options
within a narrow spectrum that excludes the general public, which
continues to favor a standard tax-based (single-payer) system by
considerable margins, as has been the case from the mid-1940s.14
But on "free trade," discipline eroded significantly (not necessarily
for good reasons, a different matter). Accordingly, as noted, it was
necessary to undertake "population control measures," to adopt some
terminology of counterinsurgency literature.

Returning to the traditional methods pioneered by the PR industry,
the New York Times, in a front-page story, graciously
provided the foolish masses with "A Primer: Why Economists Favor
Free-Trade Agreement." Critics of the executive version of NAFTA are
declared to be "malicious" liars, with what they say entirely ignored
apart from the easy and irrelevant targets. The Times
patiently explains the "fundamental insights" about international
trade that have not changed for 250 years, citing the "legendary
textbook" in which Paul Samuelson quotes John Stuart Mill as saying
that international trade provides "a more efficient employment of the
productive forces of the world." Who but a lunatic could oppose that?15

To be concrete, who but a lunatic could have opposed the
development of a textile industry in New England in the early 19th
century, when British production was so much more efficient that half
the New England industrial sector would have gone bankrupt without
very high protective tariffs, thus cutting short industrial
development in the United States? Or the high tariffs that radically
undermined economic efficiency to allow the United States to develop
steel and other manufacturing capacities? Or the gross distortions of
the market that created modern electronics? Who could be so silly as
to fail to understand that we would be far better off if the US were
still pursuing its comparative advantage in exporting furs and crops
from stony New England soils, while India produced textiles and ships
and, for all we can guess, might have led the way to industrial
revolution? Perhaps joined by Egypt, which might not have had to rely
on such radical violation of market principles as extermination of the
natives and slavery to enable King Cotton to fuel the industrial
revolution, as the British and Americans did. And who could be so
ridiculous as to contemplate a NAFTA designed to reflect the interests
and concerns that are actually articulated by critical voices in all
three of the countries to be linked by treaty arrangements?

No reflections on these matters appear in the primer offered to the
backward peons.

Thanks to extreme departure from market orthodoxy, things did not
pursue the course that economic rationality might have entailed. Thus
India, under British rule, deindustrialized, becoming an impoverished
agricultural society, while Britain prospered. Egypt's attempt to
enter the industrial world was beaten back by British power. The
pattern has extended through much of the world, the US taking the lead
in the campaign against independent development abroad, and against
market discipline at home, as Britain faltered in the task. Today,
India, like most of the South, is undergoing neoliberal "structural
adjustment" reforms, while the US, as always, violates market
principles as it pleases along with the rest of the industrial world,
most of it more protectionist than in 1980, the Reaganites often
leading the pack in the attack on economic rationality.

There are notable effects, and beneficiaries are not lacking. Take
diamonds. Seven out of ten diamonds sold in the West are cut in India,
with super-cheap labor, now being driven down to still greater depths
of misery thanks to structural adjustment. But there is a bright side:
"We pass some of the benefits to our overseas customers," an Indian
diamond exporter observes. Workers and their families may starve to
death in the New World Order of economic rationality, but diamond
necklaces are cheaper in elegant New York shops, thanks to the miracle
of the market.

There are also a few highly touted success stories, notably Ghana,
"regularly cited by [International Monetary] Fund and [World] Bank
economists as the prime example of how structural adjustment cures
failing economies and places them on a path to sustainable growth,"
Ross Hammond and Lisa McGowan point out in a review of this
"showcase." Thanks to its obedience to market discipline, Ghana was
"showered with foreign aid," including more soft loans from the World
Bank than any country except China and India (in absolute, not per
capita value). Manufacturing has declined, as have domestic food and
livestock, and food self-sufficiency generally. Malnutrition has
increased, environmental degradation is proceeding apace, the external
debt has tripled, and since 1987, Ghana has paid more to the IMF than
it has received -- a standard Third World phenomenon, as the capital
hemorrhage from the poor to the rich countries has been joined by
capital export to the IMF and Work Bank, now "net recipients of
resources from the developing countries," the South Centre (formerly
the South Commission) reports in a 1993 study. But there are reasons
for IMF and Bank enthusiasm about Ghana. Agroexport has grown, "rich
Ghanaians have fared quite well under adjustment" as land ownership
and income have concentrated, and Western creditors and investors are
doing nicely. The leading success story deserves its reputation.16

The picture only darkens as we move closer to home, where our
benevolence can be exercised more efficiently. Consider Nicaragua,
destroyed by US terror and economic warfare, now "challenging Haiti
for the unwanted distinction of being the most destitute country in
the Western hemisphere," Hugh O'Shaughnessy reports from Managua.
Infant mortality has reached the highest level in the continent after
a dramatic decline before the effects of the US war set in by the
mid-1980s. The UN reports that one-quarter of all children are
malnourished. Diseases that had once been almost eliminated are
rampant. Women set up street corner soup kitchens "to save tens of
thousands of youngsters from starvation." Sandinista health,
nutrition, literacy and agrarian programs "have been scrapped by a
government pressed by the International Monetary Fund and Washington
to privatise and cut public spending." The social fabric is coming
apart under severe duress, with rapidly rising crime and violence, as
usual directed mainly against the most vulnerable people: rape, for
example, is escalating.

"The country's leaders seem to care little," O'Shaughnessy reports,
though there is little they can do in the face of the orders from on
high. "Finance Minister Emilio Pereira boasts that Nicaragua has the
lowest inflation in the western hemisphere -- never mind that its four
million people are starving." The far right refuses any compromise,
knowing "that it has the support of the US government." "The Central
American Foreign Ministers and secretary general of the Organisation
of American States, who came on a mission of mediation, left in
despair [on Sept. 9] after [right wing elements of the US-backed UNO]
refused to join peace talks."

In the countryside, the situation is even worse than in Managua.
Contra forces are fighting again in the North, boasting of their Miami
suppliers. Others too are mobilized, as desperation is driving
peasants to armed combat. In the main cotton producing areas, not an
acre was sowed this year because of lack of credits -- though the most
powerful producers, including the minister of agriculture and
cattle-ranching and the president of the High Council of Private
Enterprise, Ramiro Gurdian, received over $40 million in loans last
year, Barricada Internacional reports. Central America
specialist Douglas Porpora writes that 70% of what limited credits
there are go to "a small number of large export producers," in accord
with standard US policies of enriching the wealthy sectors involved in
agroexport. Farmers had been driven out of these regions by Somoza,
who had taken over the land for cotton export, part of the "economic
miracle" hailed in the US, as the economy grew while the population
starved. After years of intense pesticide use, much of the soil has
lost its fertility. Banana exports and other agricultural production
have also collapsed, and sugar mills, including those which had become
profitable under government control, are being shut down, apparently
in a campaign by the former owners, now restored, to destroy the
unions and reverse the gains in workers' rights of the past years.17

Despite its victory, the US is not satisfied. Nicaragua's people
must suffer much more to atone for the crimes they have committed
against us. In October 1993, the IMF and World Bank, virtually US-run,
presented new demands of unusual severity. Nicaragua must reduce its
debt to zero; eliminate credits from BANIC, one of the remaining state
banks; privatize enterprises and government services such as energy
and water, to ensure that poor people really feel the pain -- unable
to give their children water to drink, for example, if they cannot
pay, thanks to zooming unemployment. Nicaragua must cut public
expenditures by $60 million, virtually eliminating much of what
remains of health and welfare services, while the mounting disaster
offers new opportunities to condemn the "economic mismanagement" of
the despised enemy.

The $60 million figure was perhaps selected for its symbolic value.
Last year the already privatized banks shipped $60 million abroad,
following sound economic principles: playing the New York stock market
is a far more efficient use of resources than giving credits to poor
bean farmers, as any competent student of economics can explain. The
bean harvest was lost, a catastrophe for the population. Banks are now
to be fully privatized, to ensure the "more efficient employment of
the productive forces of the world," with consequences for the
population that are evident but that do not enter into calculations of
economic rationality, as sophisticates understand.

It is only fair to add that the wonders of the free market have
opened up alternatives, not only for rich landowners, speculators, and
corporations, but even for the starving children who press their faces
against car windows at street corners at night, pleading for a few
cents to survive. Describing the miserable plight of Managua's street
children, David Werner, the author of Where There is No Doctor
and other books on health and society, writes that "marketing shoe
cement to children has become a lucrative business," and imports from
multinational suppliers are rising nicely as "shopkeepers in depressed
communities do a thriving business with weekly refills of the
children's little bottles" for glue-sniffing, said to "take away
hunger." The miracle of the market is again at work, maximizing
efficient use of resources.18

On Nicaragua's Atlantic Coast, 100,000 people are now starving to
death, with aid only from Europe and Canada, Church sources report.
Most are Miskito Indians. Nothing was more inspiring than the laments
about the Miskitos after a few dozen were killed and many forcibly
moved by the Sandinistas in the course of the US terrorist war, a
"campaign of virtual genocide" (Reagan), the most "massive" human
rights violation in Central America (Jeane Kirkpatrick), far
outweighing the slaughter, torture, and mutilation of tens of
thousands of people by the neo-Nazi gangsters they were directing and
arming, and lauding as stellar democrats, at the very same time -- or
the "successful baby-hunting" that foreign reporters observed at
exactly that moment. What has happened to the laments, now that
100,000 are starving to death?19

The answer is simplicity itself. Human rights have purely
instrumental value in the political culture; they provide a useful
tool for propaganda, nothing more. Ten years ago the Miskitos were
"worthy victims," in Edward Herman's useful terminology, their
suffering attributable to official enemies; now they have joined the
vast category of "unworthy victims" whose far worse suffering can be
added to our splendid account. What more need be said?

"The United States has a visceral need to annihilate the
Sandinistas once and for all," said a foreign affairs expert whom
O'Shaughnessy quotes. That was evident years ago, when the refusal of
the Sandinistas to genuflect in the expected fashion aroused sheer
frenzy. In 1985, one congressman described "the lust that members [of
Congress] feel to strike out against Communism" in Nicaragua. Opinion
divided between those who called for brutal terror to punish the crime
of disobedience, and those on the far left of the respectable spectrum
who recommended that we should support terror only if it is
"cost-effective" (Michael Kinsley), and if that test fails, we should
seek other means to "isolate" the "reprehensible" government in
Managua and "leave it to fester in its own juices" (Senate dove Alan
Cranston). Nicaragua must be restored to the "regional standards" of
our terror states, Tom Wicker and other media doves declared with
passion. Nor will the US rest until the military is under Washington's
control, with consequences that are familiar throughout the continent,
a crucial element of US policy towards Latin America for 50 years,
emphasized with particular force by the Kennedy intellectuals.

Nicaragua's efforts to pursue the peaceful means required by
international law aroused particular fury. In 1984, senior US
government officials demanded that an invitation to Daniel Ortega to
visit Los Angeles be withdrawn "to punish Mr. Ortega and the
Sandinistas for accepting the Contadora peace proposal," the New
York Times reported without comment, referring to peace efforts
that the US government was able to undermine. The World Court
condemnation of the US evoked further tantrums. Washington's threats
finally compelled Nicaragua to withdraw the claims for reparations
awarded by the Court, after a US-Nicaragua agreement "aimed at
enhancing economic, commercial and technical development to the
maximum extent possible," Nicaragua's agent informed the Court. The
withdrawal of just claims for billions of dollars of reparations
having been achieved by force, Washington abrogated the agreement,
suspending its trickle of aid with demands of increasing depravity and
gall.

The imperial arrogance is most impressive. Having been condemned by
the World Court for the "unlawful use of force" against Nicaragua in a
campaign of wholesale international terrorism that no other actor in
the world scene could hope to approach, we now demand righteously that
Nicaragua prove to us that it is not engaged in terrorism. Any
further aid is conditioned on this proof, the Senate voted. And having
helped to destroy the country and its people prior to the terrorist
war, we now demand that the beneficiaries of those wonderful years
receive properties and reparations. In September 1993, while the new
foreign policy vision was taking its final form, the Senate voted 94-4
to ban any aid if Nicaragua fails to return or give adequate
compensation (as determined by Washington) for properties of US
citizens seized when Somoza fell -- assets of US participants in the
crushing of the beasts of burden by the tyrant who had long been a US
favorite. Voting against were Paul Wellstone (D-MN), Jeff Bingaman
(D-NM), Paul Simon (D-IL), Russell Feingold (D-WI). In October,
Senator Christopher Dodd, a leading Senate dove, visited Managua to
ensure that these orders are fully understood.

Nothing will satisfy the lust to punish the transgressors, even
their reduction to Haitian standards. Any mafia don would understand.
If someone on your turf fails to pay protection money, you don't just
give him a black eye. Others have to learn the lesson. The world must
come to understand what virtually limitless power will achieve if
offended in any way -- the lesson that Bolivar sought to impart.
Accordingly, the treatment is uniform, extending to Vietnamese,
Cubans, Iraqi children, indeed anyone who doesn't understand the rules
of the world for which we are the gatekeeper and the model.20

3. Demystification

A major qualification has to be added to everything said so far. I
have been adopting the standard mystification that nations are actors
in world affairs, nonsense of course. In any "really existing state,"
power is sharply skewed; those who hold it use the state to defend
their interests, whatever the impact on others at home or abroad, a
truism emphasized by that noted revolutionary Marxist Adam Smith,
among many others.

Demystifying, all looks different. Who lost War II? Certainly not
German and Japanese industrialists who dedicated themselves to the
fascist cause, and were quickly restored to power and wealth by the
conquering armies. Who won? Certainly not the anti-fascist resistance,
which was dispersed or decimated by the military victors. Who lost the
Cold War? Surely not the reigning Communist nomenklatura, now
the leaders of nomenklatura capitalism -- "a parasitical new
robber-baron class of speculators and mafiosi," as Soviet scholar
Robert Daniels calls them, with wealth beyond their wildest dreams.
Surely not the tough Communist Party boss of Sverdlovsk, Boris
Yeltsin, now elevated to the rank of leading democrat as he reverses
Russia's democratic gains from 1989, highly praised by Western
governments and press -- and by financial markets -- because of his
commitment to the "market shock" that is expected to "create a greatly
improved climate for private investments." Or his old subordinates
from the CP apparatus, now staffing his bureaucracy. Who won the Cold
War? Not the huge mass of the populations controlled by Western power
sectors, neither in the former colonial domains nor at home; nor the
common people of the East, now learning anew the lessons of their
history as Third World subjects.21

A true history will depart radically from standard formulas.

In Adam Smith's day, the "principal architects" of policy, who saw
to it that their interests were "most peculiarly attended to," were
"merchants and manufacturers." The world has changed since, quite
considerably in just the last 20 years, in part as a result of Richard
Nixon's dismantling of the post-World War II (Bretton Woods)
international economic system. One consequence of these major changes
in world order has been a huge increase in unregulated capital. The
World Bank currently estimates the total resources of international
financial institutions at about $14 trillion. Not only can European
central banks not defend national currencies in the face of this
unprecedented private power, but the European Monetary System has
"effectively collapsed" as EC governments "have experienced the power
of today's free-wheeling global capital markets," the Financial
Times reports in a review of the world economy and finance. The
huge and unregulated international capital market controls access to
capital, but "global investors impose a price. If a country's economic
policies are not attractive to them" they will use their power to
induce changes. Such pressures may not be "fatal" to the very rich,
but for the South, the international capital market is "no more than
an unacceptable arm of economic imperialism," which governments cannot
resist in an era when even in the rich countries, governments "are on
the defensive and global investors have gained the upper hand."

A related development is the dramatic shift in use of capital
resources. Cambridge University economist John Eatwell notes the
striking fact that "In 1971, just before the collapse of the Bretton
Woods fixed exchange rate system, about 90 percent of all foreign
exchange transactions were for the finance of trade and long-term
investment, and only about 10 percent were speculative.

Today those percentages are reversed, with well over 90 percent of
all transactions being speculative. Daily speculative flows now
regularly exceed the combined foreign exchange reserves of all the G-7
governments," the richest seven. One consequence is that "economic
performance in the 1970s and 1980s has been poor throughout the
industrial nations of the OECD," with growth in each G-7 country about
half that of the 1960s, unemployment at least doubled, and
productivity growth in manufacturing industry sharply down.
Furthermore, "the sheer scale of speculative flows can easily
overwhelm any government's foreign-exchange reserves," as just noted.
National economic planning is increasingly difficult even for the
rich, market instability is increasing, and governments are driven to
deflationary policies to preserve market "credibility," driving
economies "toward a low-growth, high-unemployment equilibrium," with
declining real wages and increasing poverty and inequality.

A third related development has been the sharpening of the
double-edged conception of the market: fetters for the weak, to be
thrown aside at their pleasure by the strong. During the past 20
years, free market rhetoric has soared to glorious heights, while the
rich countries have enhanced their protections against market
discipline. GATT economist Patrick Low draws attention to "the
sustained assault on [free trade] principle from which the GATT
suffered, starting around the early 1970s," a "difficult period
economically" until today, in which "the GATT did not fully succeed in
holding the line against growing protectionism and systematic decline"
-- to put it mildly. Again, the Reaganites combined the two tendencies
quite brilliantly, orating in free market voices to the poor while
assuring the rich, loud and clear, that the state will intervene
massively to protect their interests. Secretary of the Treasury James
Baker "proudly proclaimed that Mr Ronald Reagan had `granted more
import relief to US industry than any of his predecessors in more than
half a century'," international economist Fred Bergsten points out,
adding that the Reaganites specialized in the kind of "managed trade"
that most "restricts trade and closes markets," voluntary export
restraint agreements -- "the most insidious form of protectionism,"
which "raises prices, reduces competition and reinforces cartel
behaviour." The increase in the Pentagon budget alone is a major form
of state intervention in the economy for the benefit of the rich, and
has been understood just that way for half a century -- one reason why
there will be a long wait for a "peace dividend."

A fourth related development has been the rapid acceleration of the
internationalization of the economy. Foreign sales of Transnational
corporations (TNCs) now far exceed all of world trade -- and of what
is called "world trade," well over a third is now estimated to be
intrafirm transactions, centrally managed interchanges within
corporations that happen to cross an international border -- one of
many reasons why talk about "free trade" and "markets" is of limited
relevance to the real world.

An obvious corollary is the sharp decline in meaningful democracy
discussed before in these pages (see, e.g., Edward Herman, "The End of
Democracy?," Z September), as extreme totalitarian
institutions (corporations, banks, investment firms, etc.), with
strict top-down control, internal secrecy, and only the most limited
public accountability gain even further power on a global scale.
Naturally they are constructing organs of governance to reflect their
interests (GATT, the IMF and World Bank, the EC executive, G-7 closed
sessions, etc.), all properly insulated from popular interference,
even awareness, a new and higher stage in the long struggle to remove
any threat to "top-down" forms of democracy that enhance "the
traditional structures of power with which the United States has long
been allied" -- eliminating mystification, "the traditional structures
of power" with which the "principal architects" of US government
policy and the interests they serve have "long been allied."

The consequences are not hard to see or understand: slowdown in
economic growth, decline in economic or other planning in the
interests of the general population, and extension of the Third World
model to the rich countries themselves as the domestic population
becomes superfluous for profit-making, the supreme human value in the
world for which we are "the gatekeeper and the model."

The US and Britain have been leading the way in these developments,
and their accomplishments are welcomed by those who matter. While the
new Clinton vision was receiving its final touches, a front-page story
in the Wall Street Journal reported "a welcome
development of transcendent importance," no less: "the increasingly
competitive cost of U.S. labor." Thanks to the harsh attack on labor
through a combination of state power and improved opportunities to
shift production abroad, US labor costs per unit output fell 1.5% in
1992, while costs increased in Japan and Europe, as well as Taiwan and
South Korea. In 1985, hourly pay in the US was higher than the other
G-7 countries. By 1992, it had fallen to below its wealthy
competitors, apart from England, where Thatcher had done even better
in punishing working people. Hourly wages were 60% higher in Germany
than in the US, 20% higher in Italy. The US has not yet reached South
Korea and Taiwan, but progress is being made, in the richest country
in the world, with unparalleled advantages -- and a highly class
conscious business community, fighting a bitter class war against an
enemy lacking resources, organization, and meaningful modes of
interaction or participation.22

The lessons are spelled out by Business Week. Europe
must "hammer away at high wages and corporate taxes, short working
hours, labor immobility, and luxurious social programs." It must learn
the lesson of Britain, which finally "is doing something well," the
Economist announces approvingly, with "trade unions
shackled by law and subdued," "unemployment high," and the Maastricht
social chapter rejected so that employers are protected "from
over-regulation and under-flexibility of labour" (job security).
American workers are barely a step behind.

The end of the Cold War offers new weapons for use against working
people in the rich societies. There are "green shoots in Communism's
ruins," exults the world's leading business daily, the London
Financial Times; not everything is grim in the former Communist
world. The "green shoots" are the new opportunities for corporations
to reduce costs thanks to "rising unemployment and pauperisation of
large sections of the industrial working class" as capitalist reforms
are instituted. GM opened a $690 million assembly plant in East
Germany, where workers are willing to "work longer hours than their
pampered colleagues in western Germany" at 40% of the wage and with
few benefits, the journal relates happily. Poland is still better,
with workers available at 10% the wage of the pampered Western
workers, kept that way "thanks largely to the Polish government's
tougher policy on labour disputes," that is, repression of labor.

Of course, the term "markets" has its usual meaning. GM purchased
an auto plant near Warsaw, economist Alice Amsden comments, "on the
under-the-table condition that the Polish government provide it with
30 percent tariff protection" -- the usual form that "free market"
enthusiasms take. Tax holidays for investors are also offered, among
other gifts.

The same is true when our own growing Third World seeks to entice
foreign investors. Alabama recently beat out competitors for a new
Daimler-Benz plant for which its population "will pay dearly," the
Wall Street Journal noted a few days after the Clinton
economic strategy was announced. Germany's leading conglomerate paid a
royal $100 for the plant site, and has been offered a package of tax
breaks valued at over $300 million, along with other publicly-funded
services. Alabama "has a Third World economy," the head of an economic
development group observes: "They're losing money to invest in their
people, their roads, their state in general," as the market performs
its miracles. The traditional Third World can explain to us how it
works.23

The prospects are inspiring. Canadian social benefits and workers'
rights can be attacked through "free trade," which forces
harmonization downwards to US standards. The same device can be used
to "lock the United States into a low-wage, low-productivity future,"
the congressional Office of Technology Assessment concludes in its
review of the executive version of NAFTA, scrupulously designed to
protect rights of investors, not workers or future generations (the
environment). And an increase in standard of living for Mexican
workers is not a serious threat, given harsh dictatorial rule and the
flooding of the labor market as peasants are driven from the land by
US agribusiness exports. German workers had become "used to some of
the best working conditions on earth," Business Week
comments under the heading "Time to Leave the Cocoon?" But no more, as
some "60% of German industrial jobs are threatened by competition from
Eastern Europe, Asia, and the U.S.," the last now offering its
contribution to the ranks of the Third World thanks to "the welcome
development of transcendent importance." With these "green shoots"
rising in old and new Third Worlds, Germany's biggest employers'
federation, Gesamtmetall, was able to issue a "declaration of war,"
cancelling "union wage and vacation contracts -- for the first time
ever." Meanwhile profits should do just fine, as the world moves
towards the desired two-tiered model under its new visions.24

In brief, the developments of the past years offer new ways to put
the screws on the overwhelming majority of the population both abroad
and at home, options enhanced by the end of the Cold War --
which is why the Cold War victors are celebrating so triumphantly:
investors, executives, and wealthy professionals at home; the former
Communist Party rulers now joining in the global rip-off; their
counterparts in the traditional South; and, of course, respectable
sectors of the educated communities, who are called upon to trumpet
the "victory for a set of political and economic principles: democracy
and the free market." The Clinton vision merely announces another
small step towards the same ends.

How far can this go? Will it really be possible to construct an
international society on something like the Third World model, with
islands of great privilege in a sea of misery -- fairly large islands,
in the richer countries -- and with controls of a totalitarian nature
within democratic forms that increasingly become a facade? Or will
popular resistance, which must itself become internationalized to
succeed, be able to dismantle these evolving structures of violence
and domination, and carry forth the centuries-old process of expansion
of freedom, justice, and democracy that is now being aborted, even
reversed? These are the large questions for the future.

14 For a
review of public opinion studies, and the ways in which the facts have
been falsified or suppressed, see Vicente Navarro, in Navarro, ed.,
Why the United States does not have a National Health Program
(Baywood, 1992).